The Latest in Long-Term-Care Insurance

"Neither of us had really read the paperwork," says Burns. "You really had to sit down and look at the lingo to understand."

Since first launched in the 1970s, long-term-care insurance has grown increasingly complex as dozens of plans, complete with numerous riders and thick booklets of terms, have entered the market. The latest generation of plans aims to alleviate some of the costs and some of the restrictions that were once standard in the industry. Unfortunately, however, these plans are just as confusing as their predecessors.

"The biggest problem for people shopping right now is understanding what they ought to be buying. You feel like you need a crystal ball. [And] I think some of the complexities arise from sellers who may not fully understand the products," says Sandy Praeger, president of the National Association of Insurance Commissioners, a consortium of state insurance commissioners who oversee the insurance industry.

To help you wade through all the options, here's what you need to know about some of the latest in long-term-care-insurance plans. (For details on premiums and benefits of these plans please see the table at the end of this story.)

Policyholders with John Hancock's Leading Edge plan, for example, can increase their coverage each year, assuming they remain healthy. If they tack on the consumer price index inflation rider (with this, benefits increase at the same rate as the annual change in CPI), they get the option to increase coverage by 10% of their daily benefit every three years regardless of health status. By March, the plan will be available in every state except California.

MetLife's LTC LifeStage Advantage policy offers two options. The "simple advantage plan" allows a holder to increase their coverage every three years until age 65 for a total benefit that's double the original amount. And the "custom advantage plan," offers a 3% or 5% inflation protection, which is added to the policyholder's current benefit amount every year. This policy will likely be available in every state by the end of 2008.

Sharon Luker, a certified financial planner and president of LTC Planning Consultants in Plano, Texas, sells John Hancock's life stage policy. She says life stage plans are geared toward people who currently don't have enough cash (either because they're paying for their child's college tuition or caring for an aging parent) to buy a long-term-care policy with better benefits, but expect to have more money in the future. Like most long-term-care policies, however, these products have drawbacks. "Most seniors really do have very low incomes," says Molly O'Malley, senior policy analyst at the Kaiser Family Foundation. So, it's unrealistic that people will have more money for long-term-care insurance as they're aging and working less.

Plus, these plans can get expensive. "Insurance companies don't give anything without being paid," says Richard Drew, a certified financial planner (who doesn't sell long-term-care insurance) at Westport, Conn.-based Hayden Financial Group. As you add more benefits, be prepared to see premiums increase, says Drew.